SOURCE: Adaptec

March 16, 2005 23:00 ET

Adaptec and ServerEngines Create Strategic Alliance to Jointly Develop Next Generation IP Storage Products

Alliance Accelerates Time-to-Market of Adaptec Next Generation iSCSI Products -- Including 10Gb iSCSI -- That Eliminate Performance Barrier Between Fibre Channel and iSCSI

MILPITAS, CA -- (MARKET WIRE) -- March 16, 2005 -- Adaptec, Inc. (NASDAQ: ADPT), a global leader in storage solutions, today announced that it has entered into a strategic alliance with ServerEngines LLC, a privately held startup company that develops next generation I/O silicon, to advance development of Adaptec's iSCSI components. Working together, the two companies will accelerate time-to-market of advanced iSCSI technology, such as 10Gb iSCSI, that is expected to give enterprise customers better performance than Fibre Channel Storage Area Networks (SANs) while using the simpler and lower cost IP infrastructure.

Under the terms of the alliance, ServerEngines will employ selected Adaptec engineers, license certain technology, and acquire certain assets related to Adaptec's iSCSI and TCP/IP offload protocol engines. ServerEngines will leverage its high performance ASIC technology and expertise to make future versions of Adaptec iSCSI products. The resulting Adaptec next generation iSCSI products will be fully backward compatible with current Adaptec Vega-based iSCSI products. This allows customers to protect their storage investment while enabling an easy migration to the higher performance IP SANs needed for today's data-intensive enterprise organizations.

"While iSCSI adoption is well underway, we expect it to ramp significantly with the availability of next generation products that eliminate the performance barrier between IP and Fibre Channel SANs," said Robert N. Stephens, president and chief executive officer, Adaptec. "Working together with ServerEngines, we expect to produce the exciting new products needed to move iSCSI to the next level of enterprise computing."

Located in Santa Clara, CA, ServerEngines is the latest company founded by entrepreneur Raju Vegesna who has founded other successful startups including ServerWorks. Currently, ServerEngines is focused on delivering high performance I/O silicon solutions.

"Adaptec is the leader in iSCSI development with significant innovations in the area of iSCSI acceleration and management software," said Raju Vegesna, chief executive officer, ServerEngines. "Combining Adaptec's technology and key development engineers with ServerEngines' entrepreneurship and high performance silicon technology and development expertise will enable Adaptec and its customers to capitalize on the true potential of iSCSI."

Safe Harbor Statement

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the expectation that iSCSI adoption will ramp once 10Gb products are available and regarding the anticipated benefits of Adaptec's strategic alliance with ServerEngines LLC, including Adaptec's ability to deliver additional time-to-market and cost advantages, the expected benefits to Adaptec's OEM and channel customers and Adaptec's ability to quickly and efficiently capitalize on an emerging market. These forward-looking statements are based on current expectations, forecasts and assumptions and involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks include: difficulty in forecasting the volume and timing of customer orders; fluctuations in demand in the server, network storage and desktop computer markets; Adaptec's target markets' failure to accept, or delay in accepting, network storage and other advanced storage solutions; any decline in consumer acceptance of Adaptec's products; the markets' failure to accept Adaptec's new products; and the adverse effects of the intense competition Adaptec faces in its business. For a more complete discussion of risks related to Adaptec's business, reference is made to the section titled "Risk Factors" included in its Form 10-Q for the quarter ended December 31, 2004, on file with the Securities and Exchange Commission. Adaptec assumes no obligation to update this information or the Risk Factors included in its Form 10-Q for the quarter ended December 31, 2004.

About Adaptec

Adaptec Inc. (NASDAQ: ADPT) provides end-to-end storage solutions that reliably move, manage and protect critical data and digital content. Adaptec provides software and hardware solutions for storage connectivity and data protection, storage networking and networked storage subsystems to leading OEM and distribution channel partners. Adaptec solutions are in use by enterprises, ISPs, medium and small businesses and consumers worldwide. Adaptec is an S&P Small Cap 600 Index member.

About ServerEngines

ServerEngines LLC is a privately held startup recently founded by Raju Vegesna and several industry veterans. The company is focused on developing innovative solutions for the Enterprise Computing market. ServerEngines is based in Santa Clara, CA.

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